Differences in Financing when...

[Michael Dunn]

How is/will the financing be different for a property that I tell my Lender up front, that I am purchasing with the intent on " Flipping " the property vs buying it as an O.O. ?

Will the fees as a whole be more, as well as the interest that I will have to pay ?

And I just read an article for 2014, that states that the 90-day Flip rule is still in effect, in regards to not being allowed to sale the property, for more than 20% of the price in which you purchased the house for.

So if this is still in effect, just wait more than 90 days from the date you purchase the property, and " Then " you can sell it for as much as the Market allows for the property via what ever it's ARV appraisal is ?

Thanks everyone, as always, I appreciate all the help and insight on these questions/topics

[Brian Fazekas]

@Michael Dunn . From my experience, I haven't noticed much in extra expenses/fees. I believe my interest increased about 1% for it being an investment property (flip or hold). But that is about all of the extras.

In the beginning I was afraid of the 90 day rule limiting when I could sell the property. However, there are ways around it:

1) Justify the price increase with receipts and a repair list. (I typically don't do take this route because I do a lot of work myself...which I cannot write off since I am not a general contractor).

2) The financial institution will order a second appraisal. Ironically enough, I have held properties even beyond the 90 day period...closer to 120 days and still had to get the second appraisal. You are usually at the lender's discretion, and I have never had a problem with them not appraising up.

3) Encourage your buyer to go with the conventional mortgage. I have done this a few times by paying for their additional closing costs (usually up to 3%). It has been worth the 3% to not go with the FHA or RD route.

Again, I'm in Michigan and this has worked for me on five flips. Hope this helps.

Brian